18 January 2002. Thanks to AF.
Source: District of Columbia Court of Appeals electronic files via
PACER.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 12, 2001 Decided January 18, 2002
No. 00-5386
United States Telecom Association,
Appellant
v.
Federal Bureau of Investigation, et al.,
Appellees
Appeal from the United States District Court
for the District of Columbia
(No. 98cv02010)
A. Stephen Hut Jr. argued the cause for appellant. With
him on the briefs were John H. Harwood II, Samir C. Jain,
Lawrence E. Sarjeant, Linda L. Kent and John W. Hunter.
Anne Murphy, Attorney, U.S. Department of Justice, ar-
gued the cause for appellees. With her on the brief were
Kenneth L. Wainstein, U.S. Attorney, and Douglas N. Letter,
Counsel, U.S. Department of Justice. Daniel L. Kaplan,
Counsel, entered an appearance.
Before: Ginsburg, Chief Judge, Henderson, Circuit Judge,
and Williams, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
Williams.
Williams, Senior Circuit Judge: Electronic eavesdropping
has historically proceeded on a basis of cooperation between
law enforcement authorities and telephone service providers.
In 1970 Congress regularized the relationship somewhat by
providing that a court order for electronic surveillance should,
at the request of the officer applying for authority, direct the
provider to furnish the applicant with the necessary "informa-
tion, facilities and technical assistance." Act of July 29, 1970,
Pub. L. No. 91-358, tit. II, s 211(b), 84 Stat. 654 (1970),
codified at 18 U.S.C. § 2518(4). Because of rapid technologi-
cal development since then, Congress in 1994 added further
structure with the Communications Assistance for Law En-
forcement Act ("CALEA" or the "Act"), 47 U.S.C. § 1001 et
seq. (1994). (Each of the statute's sections has a number 899
lower than that of its codified equivalent in Title 47; for
simplicity's sake we use only the latter.) The Act has re-
quirements relating to both the "capability" of telephone
service providers to intercept communications and their "ca-
pacity" to do so. In United States Telecom Ass'n v. FCC, 227
F.3d 450 (D.C. Cir. 2000), we addressed "capability"; here we
deal only with "capacity."
In very simplified form, CALEA sets up the following
regime as to capacity, involving three key phases: (1) The
Attorney General issues "notices" of what capacity is needed.
The Attorney General in fact has delegated his duties to the
FBI, and we henceforth refer to it exclusively. (2) Each
carrier responds with a "statement" of the modifications any
of its systems or services will need to provide the required
capacity. (3) A carrier is deemed in compliance with the
FBI's capacity notices, without having made the specified
modifications, until the FBI agrees to reimburse the carrier
for those modifications. We spell out the scheme in more
detail below.
In 1998 the FBI issued a set of rules implementing the
Act's capacity requirements. See Implementation of Section
104 [47 U.S.C. § 1003] of CALEA, 63 Fed. Reg. 12218 (March
12, 1998) ("Final Notice"). United States Telecom Associa-
tion ("USTA"), a trade association of about 1400 telephone
companies, sought relief in district court against various
provisions of the rules. First, it argued that the FBI had
erroneously defined the class of "modifications" for which
carriers might be eligible for reimbursement. Second, it said
that the FBI's concept of the required "notices" misread the
statute in a variety of ways, each increasing the carriers'
burdens and their risks of being found noncompliant. In an
unpublished opinion the district court granted summary judg-
ment in favor of the FBI on all issues.
Reviewing the grant of summary judgment de novo, see,
e.g., Shields v. Eli Lilly & Co., 895 F.2d 1463, 1466 (D.C. Cir.
1990), we affirm the district court with respect to the reim-
bursement scheme, finding that the FBI correctly defined the
"modifications" required to be reimbursed. On the other
hand, finding error on the part of the FBI on each of the
disputes about its notices, we reverse on those issues, with
instructions to the district court to remand the case, in one
instance vacating the challenged feature of the rules, in the
others not.
* * *
CALEA requires the FBI to issue a notice of both the
"actual number" of interceptions and devices that it expects
will be conducted and used "simultaneously" by October 25,
1998, § 1003(a)(1)(A), and the "maximum capacity" required
to accommodate the surveillance that enforcement agencies
"may conduct and simultaneously use" after that date,
s 1003(a)(1)(B). Subject to a qualification relating to reim-
bursement of necessary modifications, service providers are
required within three years after notice to have the capacity
specified in § 1003(a)(1)(A) and the ability "expeditiously" to
expand to the "maximum capacity" specified in
s 1003(a)(1)(B). See §§ 1003(b)(1), 1003(e). The FBI notice
under § 1003(a)(1)(A) is to state
the actual number of communication interceptions, pen
registers, and trap and trace devices, representing a
portion of the maximum capacity set forth under sub-
paragraph (B), that the [FBI] estimates that [law en-
forcement authorities] may conduct and use simulta-
neously.
47 U.S.C. § 1003(a)(1)(A) (emphasis added). Pen registers
are devices that record the telephone numbers dialed by the
surveillance's subject; trap and trace devices record the
telephone numbers of the subject's incoming calls.
Each of the carriers is required to respond to the notice of
capacity requirements with a "statement" of "systems or
services that do not have the [necessary] capacity."
s 1003(d). The FBI reviews these statements and "may"
agree to reimburse the carrier "for costs associated directly
with modifications to attain" the capacity requirements.
s 1003(e). Until the FBI agrees to reimburse the necessary
modifications specified by a carrier, the carrier is considered
in compliance. Id.
We address first the cost allocation issue, then the charac-
ter of the notices to be issued by the FBI.
* * *
Cost Allocation. We start with the key statutory provi-
sions. Section 1003(d) sets out the duty of the carrier to
submit a statement responding to the FBI's notice, and
s 1003(e) states the relationship between a carrier's compli-
ance and the FBI's decision on what to reimburse:
§ 1003(d) Carrier statement
Within 180 days after the publication by the [FBI] of a
notice of capacity requirements pursuant to subsection (a)
or (c) of this section, a telecommunications carrier shall
submit to the [FBI] a statement identifying any of its
systems or services that do not have the capacity to accom-
modate simultaneously the number of interceptions, pen
registers, and trap and trace devices set forth in the notice
under such subsection.
§ 1003(e) Reimbursement required for compliance
The [FBI] shall review the statements submitted under
subsection (d) of this section and may, subject to the
availability of appropriations, agree to reimburse a telecom-
munications carrier for costs directly associated with modi-
fications to attain such capacity requirement that are deter-
mined to be reasonable in accordance with section 1008(e)
of this title. Until the [FBI] agrees to reimburse such
carrier for such modification, such carrier shall be consid-
ered to be in compliance with the capacity notices under
subsection (a) or (c) of this section.
47 U.S.C. §§ 1003(d), (e).
The Final Notice provided for eligibility for reimbursement
as follows:
Capacity costs associated with any equipment, facilities
or services deployed after the Carrier Statement period
of 180 days following the effective date of this Final
Notice of Capacity will not be eligible for reimbursement.
Final Notice, 63 Fed. Reg. at 12220-21. But the language is
concededly different from the thought the FBI intended to
convey. In fact, government counsel assured us at oral
argument (with the full assent of USTA's counsel), that this
sentence should really be read as if it also contained the
material added in boldface:
Capacity costs associated with any equipment, facilities
or services deployed after the Carrier Statement period
of 180 days following the effective date of this Final
Notice of Capacity will not be eligible for reimbursement,
except costs for modifications the FBI has agreed to
compensate under § 1003(e).
Thus, expenses incurred to add equipment--other than for
modifications that the carrier specified in its "statement" and
that the FBI in its discretion agreed to reimburse--are not
reimbursable.
USTA objects that under the FBI's reading of § 1003(e), a
carrier will have to pay for all capacity it adds in the future
(except for the reimbursed "modifications"), even though the
government will be able to help itself to part of the added
capacity. As was developed at oral argument, this skews a
carrier's incentives: rather than invest in capacity additions
sized to accommodate not only its customers' prospective
demand but also the government's future wishes, it will elect
smaller expansions, anticipating that after the next FBI
notice and carrier statement its equipment will require "modi-
fication" and thus government reimbursement. USTA fur-
ther argues that we should not defer to the FBI's reading of
the Act under Chevron U.S.A. Inc. v. Natural Resources
Defense Council, 467 U.S. 837 (1984), because the government
has a sharp pecuniary interest in the outcome: under USTA's
reading of the statute, the government would have to pay for
its share of all new capacity that it uses.
Of course the issue of Chevron deference arises only if the
statute doesn't plainly settle the issue. Chevron, 467 U.S. at
842-43 (holding that if "Congress has directly spoken to the
precise question at issue," the court "must give effect to the
unambiguously expressed intent of Congress."). Here we
find that the Act does so, and therefore need not resolve
USTA's pecuniary-interest theory.
The only costs for which the Act provides any compensa-
tion are for "modifications" under § 1003(e). These "modifi-
cations" are necessarily to "systems or services" identified by
the carrier in its § 1003(d) statement as "not hav[ing] the
capacity" to accommodate the needs set out in an FBI notice
under § 1003(a)(1). And those "systems and services" are
necessarily systems and services extant at the time the
carrier files its statement. In other words, eligibility for
reimbursement extends only to modifications as needed to
mend deficiencies set out in the carrier's § 1003(d) statement.
USTA claims to find support in the passage of § 1003(e)
that states: "Until the [FBI] agrees to reimburse [a] carrier
for [reasonable] modifications, such carrier shall be consid-
ered in compliance with the capacity notices." 47 U.S.C.
s 1003(e). But the carrier's being "in compliance" appears to
refer only to the modifications identified in the § 1003(d)
statement, and says nothing with respect to the government's
uncompensated use of capacity that a provider may add, on
its own, after submitting its § 1003(d) statement.
USTA also points to CALEA's enforcement provision, pro-
hibiting a court from issuing any enforcement orders that
"require a telecommunications carrier to meet the Govern-
ment's demand for interception ... to any extent in excess of
the capacity for which the [FBI] has agreed to reimburse
such [a] carrier." 47 U.S.C. § 1007(c)(1). But USTA's literal
reading of this section is plainly unsound; even USTA does
not think the section governs available capacity antedating
the FBI's very first § 1003(a)(1) notice. The FBI's reading
of the section is that it reinforces the "safe harbor" provided
by § 1003(e)'s assurance to a carrier that it will not be out of
compliance if law enforcement authorities demand capacity
that the carrier's § 1003(d) statement has said was needed
(until the FBI funds the additional capacity). As appellant's
construction of § 1007(c)(1) is impossible on a literal basis and
would require us to twist the meaning of § 1003(e) itself, we
find it unconvincing.
USTA's remaining textual analysis contrasts the Act's lan-
guage on capacity with its language on capability, which
explicitly provides for compensation for modifications of
equipment deployed before January 1, 1995 to accommodate
law enforcement, § 1008(d), and none for equipment deployed
thereafter. We fail to see how the distinction helps USTA.
The capability provisions plainly differ substantially from
those for capacity, but the contrast sheds no light on the
proper interpretation of §§ 1003(d) & (e).
Finally, USTA makes reference to some legislative history
it believes is supportive of its position. See Appellant's Br. at
20-21 (citing H.R. Rep No. 103-827, pt. 1, at 17, 20 (1994)).
"But we do not resort to legislative history to cloud a
statutory text that is clear." Ratzlaf v. United States, 510
U.S. 135, 147-48 (1994). See also Burlington Northern R.R.
Co. v. Oklahoma Tax Comm'n, 481 U.S. 454, 461 (1987); In
re Sinclair, 870 F.2d 1340, 1342-43 (7th Cir. 1989) (suggest-
ing that legislative history should only be used to elucidate
the meaning of the statutory text). Of course, legislative
history may "shed new light on congressional intent, notwith-
standing statutory language that appears superficially clear."
Natural Resources Defense Council, Inc. v. Browner, 57 F.3d
1122, 1127 (D.C. Cir. 1995) (internal quotation marks and
citation omitted). But in fact the force of appellant's claim
turns on its selective quotation. The House Committee Re-
port said:
After the four year transition period, which may be
extended an additional two years by order of the FCC,
industry will bear the cost of ensuring that new equipment
and services meet the legislated requirements, as defined
by standards and specifications promulgated by the indus-
try itself.
However, to the extent that industry must install addi-
tional capacity to meet law enforcement needs, the bill
requires the government to pay all capacity costs from date
of enactment, including all capacity costs incurred after the
four year transition period....
H.R. Rep No. 103-827, pt. 1, at 16-17 (emphasis added).
Appellant ignores the first sentence and quotes the second.
In fact, properly read even the second sentence does not help
appellant, for it describes the statute simply as calling on the
government to pay for "additional capacity" that "industry
must install ... to meet law enforcement needs." Just so.
Government must pay for "modifications" that it agrees to
reimburse as specified in § 1003(e), but otherwise helps itself
to capacity that is available.
Accordingly, we affirm the district court's grant of sum-
mary judgment for the government on USTA's cost recovery
claim.
* * *
The remaining issues relate to provisions dealing with how
the FBI "notices" are to specify capacity requirements.
Again USTA argues that the FBI should not enjoy Chevron
deference because of its pecuniary interest. Again we need
not address the pecuniary-interest issue, though for a differ-
ent reason from the one previously given. Even Chevron
deference requires that the agency position be reasonable,
Chevron, 467 U.S. at 843, and on none of the following issues
is that standard met.
"Expeditiously." Recall that the Act distinguishes be-
tween the "actual numbers" of interceptions and equipment
the FBI expects to be conducted and used simultaneously by
October 25, 1998, § 1003(a)(1)(A), and the "maximum capaci-
ty" required to accommodate surveillance thereafter,
s 1003(a)(1)(B). Section 1003(b) gives this distinction opera-
tional significance. Section 1003(b)(1) requires carriers by a
specified date to have the capacity [subject to § 1003(e)] to
accommodate the § 1003(a)(1)(A) demands and the ability to
"expand[ ]" to the subsection (B) "maximum capacity"; and
s 1003(b)(2) requires each carrier to "ensure that it can
accommodate expeditiously" an increase in demand up to the
"maximum capacity."
The Final Notice implements these provisions by reading
"expeditiously" to allow only five business days. Final No-
tice, 63 Fed. Reg. at 12219/1. The only rationale offered to
support the five-day period is transparently off point. The
FBI said the decision was "based on past practice as to the
time typically involved under existing procedures used by law
enforcement and telecommunications carriers to make techni-
cal interception arrangements." Id. This statement about
"past practice" relates only to provisioning individual wiretaps
upon request--a task quite different from that of increasing
total wiretapping capacity.
Worse, unrebutted evidence in the record suggests that it
would be impossible for carriers to install additional capacity
in such a short time period. Unsurprisingly, ordering new
hardware, securing its delivery, and then installing and test-
ing it takes more than five days. See id. at 12235/1 (noting
that seven commenters, including the trade association repre-
senting telecommunications equipment manufacturers, have
described this time frame as unrealistic).
In effect, then, the FBI's interpretation of "expeditiously"
de facto erases the statutory distinction between actual and
maximum capacity, even though the statute plainly intends
such a distinction and even specifies that "actual" capacity
should be "a portion of the maximum capacity set forth under
subparagraph (B)." § 1003(a)(1)(A). We therefore find un-
reasonable and vacate this aspect of the Final Notice. See
RCA Global Communications, Inc. v. FCC, 758 F.2d 722, 733
(D.C. Cir. 1985) (rejecting agency's reading of a statute that
"would deprive [the statutory provision] of all substantive
effect").
"Capacity"/"Number of," and "Simultaneously." Recall
that § 1003(a)(1)(A) requires the FBI to give notice of
the actual number of communication interceptions, pen
registers, and trap and trace devices, representing a
portion of the maximum capacity set forth under subpar-
agraph (B), that the [FBI] estimates that [law enforce-
ment authorities] may conduct and use simultaneously.
47 U.S.C. § 1003(a)(1)(A) (emphasis added). Subsection (B)
similarly requires notice of the "maximum capacity" required
to accommodate such interceptions, etc., again "simultaneous-
ly." The Final Notice insisted that these statements of
"actual number" and "capacity" were properly in terms that
drew no distinction between different types of interceptions
(e.g., communications content versus mere pen registers),
even though they differ heavily in their actual demands on
capacity. Final Notice, 63 Fed. Reg. at 12235. And it
treated interceptions as "simultaneous" if they occur on the
same day, even though they may each only take moments and
do not overlap in the least. Id. at 12225. USTA objects to
both these decisions. And rightly so.
As to "capacity," the FBI acknowledged that different
interceptions impose different demands on capacity; content
interceptions might require up to five delivery channels be-
cause of multiple participants on a call, while others, such as
pen registers and trap and trace devices, typically use only a
single channel. See id. at 12218, 12232-33. By way of
justification it said that the only historical data it had access
to did not directly reveal the information the carriers were
after: the available average national ratio of content intercep-
tions to pen registers and trap and trace devices was not "in
any way representative of any specific geographic region."
Id. at 12235. It also said that, in any event, "law enforcement
... does not know the type(s) of surveillance that will be
needed in the future." Id. at 12236.
As to simultaneity, the FBI insisted that its choice "was
logical from a law enforcement perspective" because court
orders approving wiretapping activities are phrased in terms
of days, and as a result such data was all that was available.
Id. at 12225/3, 12235/2.
The FBI's justifications of both decisions--ultimately
claims of defects in existing data--render them unreasonable.
See Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965, 969-70
(D.C. Cir. 1999). Such complete throwing up of hands is
inconsistent with the Bureau's extensive use of statistical
projections elsewhere in implementing CALEA. In fact, all
the interception numbers that the FBI gave are estimates.
For instance, to determine the actual and maximum capacity
requirements themselves, the FBI undertook to establish a
historic baseline, and then used statistical techniques to ex-
trapolate the baseline into the future. Id. at 12224-25; see
also id. at 12226/3 (stating that in determining "growth
factors," which require prediction of future capacity require-
ments, "statistical and analytical methods were applied to the
historical interception information").
As to these portions of the Final Notice, we reverse the
judgment of the district court, with instructions to remand
the case to the agency for a more adequate explanation.
Because it is not so clear as in the case of the Bureau's
interpretation of "expeditiously" that there are no defensible
grounds for its conclusions, however, the district court should
not vacate the FBI's resolutions of the "number of/capacity"
and "simultaneously" issues. Compare Allied-Signal, Inc. v.
U.S. Nuclear Regulatory Comm., 988 F.2d 146, 150-51 (D.C.
Cir. 1993) ("The decision whether to vacate depends on the
'seriousness of the order's deficiencies (and thus the extent of
doubt whether the agency chose correctly) and the disruptive
consequences of an interim change that may itself be
changed.' ").
* * *
The judgment of the district court is affirmed and reversed
as set forth above.
So ordered.